Federal aid not stopping state budget cuts

Gov. Chris Gregoire said she screamed for joy last week when the U.S. Senate finally passed a bill that will funnel another $543 million in much-needed federal aid to this state.

But it wasn't enough to clear away all the clouds of concern with the state's budget.

And sure enough today, with new signs Washington's economy is recovering slower than expected, Gregoire said she's directed state agencies to plan for additional spending cuts this October.

Agency leaders were told to prepare to deal with an across-the-board cut of between four and seven percent. Such a move could pare up to $500 million in spending between this October and June 30, 2011.

The size of the cut is based on the September revenue forecast. which she does not think will be all that good after the state collected $125 million less in tax revenues than expected in June and July.

Also today, the Department of Social and Health Services announced it is immediately paring $51 million from the state's welfare program known as WorkFirst.

And, in a related bit of news, the governor explained the portion of federal money for schools cannot be used to solve the state's budget woes. Those dollars, she said, will go directly to school districts. Many of them, she said, may hold onto them until the 2011-12 school year.

Sen Joseph Zarelli, R-Ridgefield, the ranking Republican on the Senate Ways and Means Committee, issued this statement following the governor's announcement:

"While I applaud the governor for planning ahead, I believe there are many flaws to an across-the-board cuts approach. Using that blunt instrument implies our funding priorities for things like tourism and programs for people with developmental disabilities are exactly the same. And, if revenues drop as significantly as they are likely to do in September, it is doubtful that across-the-board cuts could achieve the level of savings necessary to keep the state out of the red between now and next summer.

"A better approach would be for the Legislature to come back into a short special session to address this budget crisis. That would allow us do three things the governor cannot do through across-the-board cuts: prioritize funding toward the most essential functions of government; leave enough in reserve to get us at least through this biennium; and enact reforms that will result in long-term savings.

"The governor's proposal will not take effect until October. I believe it is incumbent upon the Legislature in the next forty-five days to come up with a better approach for the citizens of Washington.”